Harsh judgements: why Stateside lenders are upping the Q-factor

As CRE stalls, qualitative adjustments are forming a larger part of US banks’ credit risk allowances

Credit: Risk.net montage/Getty

At the end of January, shares in New York Community Bancorp tumbled after the lender posted an unexpected loss in its Q4 2023 earnings. The issue wasn’t a deal that had gone wrong for the bank or a bad bet coming back to bite it. In its earnings call, NYCB’s chief executive Thomas Cangemi – who has since resigned – told analysts the losses were due to “recalibrating our qualitative factors in the office portfolio to address [a loan] issue and increase the ACL [allowances for credit losses]

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